-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ISuCyI5ztofMoi87oWGkDrI+C6C1yfiv83QPDSxkqYX853pICSodDC005rpx+nJC Xpgfv9FsNuN5iCWgLK7Hvw== 0000950116-03-002354.txt : 20030424 0000950116-03-002354.hdr.sgml : 20030424 20030424160558 ACCESSION NUMBER: 0000950116-03-002354 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20030424 ITEM INFORMATION: Other events FILED AS OF DATE: 20030424 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEDQUIST INC CENTRAL INDEX KEY: 0000884497 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 222531298 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-19941 FILM NUMBER: 03662463 BUSINESS ADDRESS: STREET 1: FIVE GREENTREE CENTRE STE 311 STREET 2: STATE HIGHWAY 73 N CITY: MARLTON STATE: NJ ZIP: 08053 BUSINESS PHONE: 8568108000 MAIL ADDRESS: STREET 1: 5 GREENTREE CENTRE SUITE 311 STREET 2: ATTN BRUCE VAN FOSSEN CITY: MARLTON STATE: NJ ZIP: 08053 8-K 1 eightk.txt 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): April 24, 2003 MedQuist Inc. ------------------------------------------------------ (Exact name of registrant as specified in its charter) New Jersey 0-19941 22-2531298 - --------------------------------- -------------- -------------------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation or organization) File Number) Identification No.) Five Greentree Centre Suite 311 Marlton, NJ 08053 --------------------------------------------------- (address of principal executive offices) (Zip Code) Registrants's telephone number, including area code: (856) 810-8000 Item 5. Other Events. - ---------------------- Pursuant to Regulation FD Rules 100-103: Attached as Exhibit 5.1 is the script for the Registrant's first quarter 2003 investor conference call held on April 24, 2003 at 11:00 a.m. (ET). Attached as Exhibit 5.2 is the Registrant's earnings release for the first quarter ended March 31, 2003. Pursuant to Section 27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934, attached as Exhibit 5.3 is a note concerning forward-looking statements and additional information regarding factors that could cause actual results to differ materially from those in such forward-looking statements. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. MEDQUIST INC. Date: April 24, 2003 By: /s/Brian J. Kearns ---------------------------------------- Name: Brian J. Kearns Title: Executive Vice President, Treasurer and Chief Financial Officer EX-5 3 ex5-1.txt EXHIBIT 5.1 Exhibit 5.1 - ----------- MedQuist Inc. - 2003 First Quarter Conference Call: - --------------------------------------------------- Good morning everyone. I would like to take this opportunity to thank you for participating in our conference call. My name is David Cohen and I am the Chairman, President and Chief Executive Officer of the Company. Also on the call today are Brian Kearns, our Chief Financial Officer, and John Suender, our Chief Legal Officer. I first would like to make a brief opening statement and then open the call to your questions and comments. By now everyone should have received a copy of our earnings release or have had the opportunity to review the information distributed by the wire services. While the economic environment remains difficult, we remain focused on the future and on all the things we can control. As you will see from our financial results, our first quarter performance was in line with analyst expectations, according to First Call consensus estimates. Our NTP roll out is on schedule. Although it will require a significant effort to meet our target of $80 million on the platform by the end of June, we believe that goal is still achievable. Our dedicated and talented team of professionals is working hard to deliver on that goal. We continue to believe that our company's transition to a document management company will allow us to demonstrate MedQuist's clear value to the marketplace. Transcription is our bread and butter, but our strategy is to lever that foundation into something even greater. Our ASP software will lead the way into not only healthcare institutions, but also any business that has correspondence. CodeRunner, our innovative coding software, will put us in the drivers seat to expand our coding initiative. Our efforts in integrating the Lanier Healthcare acquisition are progressing according to plan. The Lanier sales force is one of the best in the healthcare services industry and we are managing this asset aggressively to maximize our distribution channel effectiveness. We are looking to our sales effort to revitalize our recent sluggish organic revenue growth, hopefully into low double-digit growth over time. Again, this will be no small task, but the sales force appears to be ready and willing to move forward engaging our hospital clients with the full suite of MedQuist products and services. We also continue to make progress in our technology development efforts, specifically regarding automated voice recognition. While this technology is still not quite ready for prime time in all areas of healthcare, there are certainly very real opportunities that exist today. We believe that going forward, we are well positioned to appreciate productivity enhancements through the creative use of this cutting edge technology. We believe that the use of this technology in partnership with Philips will help us maintain and even enhance our strong position in the medical transcription business. On a final note, as many of you are already aware, I have formally announced my retirement as CEO of MedQuist, which will be effective this July, at the end of my three-year employment contract. During my 30-year career with this company, first with Transcriptions Limited and then MedQuist, I have worked hard to successfully grow MedQuist from a small local business into the largest medical transcription enterprise in the world. Incidentally, my 30th anniversary is this month. Along the way, I have made many long lasting friendships, including those with many of you on the call today. I have spent the last few years assembling the best management team in our industry and I believe they are very well positioned to expand our leadership role in healthcare document management. I want to thank the people at MedQuist for making us successful. I know we seem to be in a pause mode right now, but we have a great company and our path is correct. At this time I would like to turn it over to Brian Kearns for a review of our financial results. Thank you David and good morning everyone. For the first quarter: MedQuist generated revenue of $124.7 million and Operating Income was $17.1 million or 13.7% of revenue. Earnings per share were $0.28, down compared to $0.32 in first quarter of last year. Excluding the nonrecurring gain on the sale of MedQuist's only owned building, which was acquired in the Lernout and Hauspie Medical Transcription acquisition in November 2001, earnings per share were $0.27. At March 31, 2003, MedQuist had $152 million in working capital including $125 million in cash. Accounts receivable were $79 million and DSO remained in the low 60's, at 61 days, which is consistent with our DSO level at year-end. The Company had essentially zero debt and shareholders equity was $422 million. At this time I will turn the presentation over to John Suender, MedQuist's Chief Legal Officer. During the conference call management will make forward-looking statements within the meaning of the safe-harbor provisions of the U.S. federal securities laws, such as market estimates, growth and expansion plans and opportunities, potential revenue and cost synergies, revenue and earnings projections, expected growth rates, and the benefits of new technologies. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from these forward-looking statements is set forth in our periodic reports filed with the SEC, including our Form 10-Q's and Form 10-K for the year ended December 31, 2002 and our form 8-K filed in relation to today's call. In addition, more detailed unaudited financial information can be found in the earnings release we issued this morning and in the Form 8-K filed in relation to today's call. At this time we would like to open up the call to your questions. Please announce your name before asking your question. Thank you. EX-5 4 ex5-2.txt EXHIBIT 5.2 Exhibit 5.2 ----------- News Release NASDAQ: MEDQ FOR IMMEDIATE RELEASE MEDQUIST REPORTS FINANCIAL RESULTS FOR FIRST QUARTER 2003 MARLTON, NJ April 24, 2003 - MedQuist Inc. (NASDAQ:MEDQ) reported revenue of $124.7 million, operating income of $17.1 million and net income of $10.5 million or $0.28 per diluted share for the three months ended March 31, 2003. Operating income for the three months ended March 31, 2003 included income of $814 thousand from the sale of a building. David A. Cohen, Chairman and Chief Executive Officer, stated, "The first quarter of 2003 continued to demonstrate the recurring revenue and strong cash flow MedQuist has earned from our blue chip client base. MedQuist continues to be the provider of choice in the medical transcription market. Management remains committed to MedQuist's growth prospects and exploring new technologies and services in order to streamline our healthcare clients' document management, transcription and health information management efforts." MedQuist is a leading provider of electronic medical transcription, health information and document management services. MedQuist provides document workflow management, digital dictation, speech recognition, mobile dictation devices, Web-based transcription, electronic signature, medical coding products and outsourcing services. MedQuist is a member of the Philips Group of Companies. Other than historical information set forth herein, this press release may contain forward-looking statements such as our anticipated future earnings growth, which involve risks and uncertainties. The Company's actual results may differ materially from those anticipated or implied in any such forward-looking statements as a result of various risks, including, without limitation, inability to predict future economic or market conditions, rapidly changing technology; inability to manage and maintain growth; inability to penetrate new markets; inability to make and successfully integrate acquisitions and transition our business strategy; decreased demand for existing products; lack of a market for new products; and failure to successfully negotiate agreements to take advantage of the opportunities facing MedQuist to broaden its service offering. Additional risks associated with the Company's business can be found in its December 31, 2002 Annual Report on Form 10-K and its other periodic filings with the SEC. Contact: Brian J. Kearns, Chief Financial Officer, MedQuist Inc., 856-810-8000 ext. 4418 Tables Follow MedQuist Inc. Financial Highlights (Unaudited) In thousands, except per share data and percentages Three Months Ended March 31, 2003 2002 ---- ---- Revenues $124,662 $113,974 Gross profit 31,860 28,964 Gross margin 25.6% 25.4% Selling, general & administrative (7,843) (3,700) % of revenues 6.3% 3.2% Research and development (1,357) -- % of revenues 1.1% n/a Depreciation expense (4,636) (4,234) Amortization expense (1,759) (1,701) Other income 814 -- Operating income 17,079 19,329 Net interest income 220 313 Equity in loss of investee (184) (184) Pretax income 17,115 19,458 Tax provision (6,590) (7,492) Net income 10,525 11,966 Net income per diluted share $0.28 $0.32 Fully diluted shares outstanding 37,630 37,958 MedQuist Inc. Financial Highlights In thousands March 31, December 31, 2003 2002 ---- ---- (Unaudited) (Audited) Assets: Current assets: Cash and cash equivalents $124,838 $ 103,392 Accounts receivable (net) 79,299 86,465 Other current assets 14,721 14,474 -------- --------- Total current assets 218,858 204,331 Property and equipment (net) 37,580 37,804 Goodwill 135,883 136,127 Other intangible assets (net) 75,088 73,798 Other assets 22,690 22,811 -------- -------- Total assets $490,099 $474,871 ======== ======== Liabilities and Shareholders' Equity: Current liabilities: Current portion of long term debt $ 30 $ 31 Accounts payable 8,259 9,908 Deferred revenue 19,772 18,789 Accrued expenses 38,397 33,701 -------- -------- Total current liabilities 66,458 62,429 Long term debt 54 54 Other long term liabilities 1,697 1,427 Shareholders' equity 421,890 410,961 -------- -------- Total liabilities and Shareholders' $490,099 $474,871 ======== ======== EX-5 5 ex5-3.txt EXHIBIT 5.3 Exhibit 5.3 - ----------- Risk Factors Concerning Forward Looking Statements - -------------------------------------------------- During our investor conference call held on the date of this filing we referred to, and during future oral disclosures or written statements we may refer to, certain risk factors concerning forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. These statements include forward-looking language such as "will likely result," "may," "are expected to," "is anticipated," "estimated," "projected," "intends to," or other similar words. Our actual results are likely to differ, and could differ materially, from the results expressed in, or implied by, these forward-looking statements. There are many factors that could cause these forward-looking statements to be incorrect, including but not limited to the following risks: risks associated with (1) our ability to recruit and retain qualified transcriptionists; (2) inability to complete and assimilate acquisitions of businesses; (3) dependence on our senior management team; (4) the impact of new services or products on the demand for our services; (5) our ability to develop and sell new products and services; (6) our ability to expand our customer base; (7) our ability to maintain our current growth rate in revenue and earnings; (8) the volatility of our stock price; (9) our ability to compete with others; (10) changes in law, including, without limitation, the Health Insurance Portability and Accountability Act of 1996 (HIPAA); (11) infringement on the proprietary rights of others; (12) our failure to comply with confidentiality requirements, including, without limitation, those imposed under HIPAA; (13) changes in economic conditions; and (14) inherent uncertainties in general relating to predicting future financial results and events. When considering these forward-looking statements, you should keep in mind these risk factors and other cautionary statements, and should recognize that those forward-looking statements speak only as of the date made. MedQuist does not undertake any obligation to update any forward-looking statement included in this Form 8-K or made elsewhere. -----END PRIVACY-ENHANCED MESSAGE-----